TORONTO (Reuters) - Royal Bank of Canada’s Chief Executive Dave McKay said on Tuesday he believes there is now a greater chance that the North American Free Trade Agreement could be scrapped.
“I think the probabilities are increasing that you’ll have some type of dynamic where there is an announcement of a scrapping of NAFTA,” he said at a conference hosted by RBC in Toronto.
Canadian bankers have expressed concern about the progress of talks to rework the trade agreement and how renegotiations could hamper the ability of clients to do business with customers in the United States and Mexico.
McKay said he agreed with other business leaders and the Canadian government that no deal would be better than a bad deal.
“We don’t want to be stuck long-term with a deal that hurts our economy,” he said at the 2018 Canadian Bank CEO Conference.
The bosses of Canada’s seven biggest banks were all speaking at the event which covered themes such as technology and Canada’s housing markets as well as the banks’ international expansion plans and the potential impact of trade negotiations.
McKay also said RBC, Canada’s biggest bank by market value, is now spending C$3 billion a year developing new technologies. The bank is one of the biggest Canadian investors in technology such as artificial intelligence and blockchain and has increased the proportion of its technology spending on innovation compared with maintaining existing systems.
Smaller rival Canadian Imperial Bank of Commerce’s Chief Executive Victor Dodig said the bank was spending around C$1 billion a year on technology, split roughly 50:50 between new technology and existing systems.
Bharat Masrani, chief executive of TD Bank Group, Canada’s second biggest bank, declined to say how much his bank spent annually on technology. TD said on Tuesday it had bought Layer 6, a Toronto-based artificial intelligence firm, for an undisclosed sum.
Brian Porter, chief executive of Bank of Nova Scotia, said Canada’s third biggest lender spent C$3.1 billion on technology last year.
Dodig also said that CIBC was continuing to consider a possible stock market listing of its FirstCaribbean business in New York. Reuters reported last month that the bank was considering the move.
“In a market like New York, we’ve seen examples of other franchises that have listed there to the benefit of shareholders and to the benefit of those financial institutions and that’s precisely why we’re pursuing this,” he said.
Reporting by Matt Scuffham; Editing by David Gregorio